Traditional customer loyalty programs provide a tracking system specifically designed to monitor customer activity (“the Trackee”) for a single retailer (“the Trackor”). These systems are beneficial because they provide the Trackor with data regarding the activity of the Trackee, which helps the Trackor better understand the effectiveness of their marketing and advertising campaigns. A drawback to these one-sided “closed systems” is that they are designed to benefit the Trackor with very little direct benefit to the Trackee(s). The Trackee has little or no control over their relationship with the Trackor.
Another drawback to the traditional systems is that they are expensive to implement because they require a sophisticated infrastructure that includes, at a minimum, specialized databases and analytical tools. Even with the correct infrastructure, however, the collected data is still incomplete. Due to difficulties with logistics, data collection, data entry, and Trackee privacy concerns, the Trackor is not able to collect a complete set of data for a Trackee. Consequently, the Trackor cannot use the data to provide targeted marketing and advertising campaigns because the Trackor may not know who they are tracking.